Options for Holding a Property Title in NYC

Larry Rothman has over two decades' of experience in the financial services industry. He has worked for institutional brokerages and independent research firms as an Analyst. In this capacity, he has analyzed the broad economy and a variety of financial instruments across a wide array of industries. He's also been a freelance writer explaining a variety of topics in personal finance, including real estate, and investing. He is a CFA Charterholder and has an M.B.A. in Finance.

Looking for a home, particularly for the first time, is an exciting time in your life. However, you should not let this cloud your judgment. A clear-headed mind when you are making a large purchase is best. This requires long-term thinking, which can prevent misunderstandings later on.

There are various options for you to hold the title to your new home. Those unmarried will find this particularly important. You should not merely assume equal ownership is the only way. You can pick the way that you and the other person find the fairest.

Sole Ownership

This is the simplest form of ownership. There is only one name on the title, as the name implies. Of course, that individual has the rights and responsibilities that go along with homeownership. There are appropriate situations where this is used. For instance, it is useful if one party has bad credit, or there is an understanding that the person on the takes sole financial responsibility for the purchase and upkeep.

On the other hand, the party on the title has no financial stake. It is also important to note that the name on the deed determines ownership and not the mortgage. Should the relationship end, you walk away with nothing, even if you have put in sweat equity and money. The property’s owner can do whatever he/she wishes, including selling it (and pocketing all of the proceedings), and leaving it to whomever he/she chooses in the event of that person’s death.

Joint tenancy

Ownership is split equally when you hold the title as joint tenants. Both names are on the title and have the same financial stakes and responsibilities. Should one person die, the property automatically transfers to the other. The process skips a time consuming and potentially costly probate. It also avoids nasty estate battles.

This seems equitable, but this means equal ownership, regardless of the financial commitment. It does not matter if one person earns significantly more money and makes most of the mortgage payments. This could prove troublesome in the event of a break-up.

Tenants in common

Two names are on the title, but you can split the percentages however you deem fit. You need a will with this option since the other person’s interest in the home does not automatically pass to you. If you do not have a will, your interest in the property goes to your heirs. This could go against your wishes.

The situation creates potential complications that you can ease by spelling out your wishes in your will. For instance, you may want the other person to live in the home after you pass on.

Changing the title

You can change how the title is held. In fact, it is advisable if your situation has evolved (e.g. you get married or break up). This is an area where hiring a lawyer is advisable. While it is typically a simple matter, you want to make sure there are no mistakes. An attorney can explain the options in order for you to make an informed decision.

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